Thursday, February 19, 2004

A political committee connected to U.S. House Majority Leader Tom DeLay sent $190,000 in what internal memos say were corporate donations to the Republican National Committee, which then doled out the same amount to seven candidates in Texas House races. It is illegal in Texas to use corporate money in political races, and some open-government advocates suggest the transaction smells of a money-laundering exercise.

DA's office looking into campaign contributions

AUSTIN – A political committee connected to U.S. House Majority Leader Tom DeLay sent $190,000 in what internal memos say were corporate donations to the Republican National Committee, which then doled out the same amount to seven candidates in Texas House races. It is illegal in Texas to use corporate money in political races, and some open-government advocates suggest the transaction smells of a money-laundering exercise.

The $190,000 in donations came in the last crucial month of the November 2002 election campaign, in which Texans for a Republican Majority (TRMPAC) had targeted 20 House races. Victory in 15 of those races led to a GOP majority and the first Republican House speaker since the 1800s.

After the Republicans took control of the Texas House in the 2002 elections, Rep. Tom Craddick of Midland was elected speaker. He helped Mr. DeLay achieve the goal of redrawing the Texas congressional map to favor Republicans.

The Travis County district attorney's office acknowledged Wednesday that it was looking into the transaction between TRMPAC and the RNC as part of an investigation into corporate fund raising by the political committee created by Mr. DeLay, R-Sugar Land.

Officials of both TRMPAC and the RNC denied any wrongdoing, saying that their dealings were legal and that the contributions were coincidental.

In e-mails obtained by The Dallas Morning News, officials with TRMPAC in September 2002 discussed using corporate funds, which they referred to as "soft money," to send a check to the national party.

According to the e-mails, the check was written by Jim Ellis, who works for Mr. DeLay as director of Americans for a Republican Majority and also shares some responsibilities with the PAC's little sister, Texans for a Republican Majority.

Mr. Ellis did not return phone calls.

The $190,000 check to the RNC is reflected in September 2002 federal disclosure records submitted by TRMPAC.

Within the next three weeks, according to federal and state disclosure records, the RNC sent seven checks to Republican House candidates totaling $190,000. Jim Dyke, a spokesman for the RNC, said the $190,000 that went out from the RNC a short time later was unrelated and that the national committee does not make any deals about how donations will be used.

"We don't allow people to earmark their contributions, and so, while the coincidence is there, the fact of the matter is that you can't tell us how to spend the money," Mr. Dyke said.

TRMPAC raised more than $600,000 in corporate contributions, which it has said was used for administrative overhead and not for political purposes, as mandated by law.

A citizen's complaint filed by Texans for Public Justice with the Travis County district attorney last year questions hundreds of thousands of dollars in TRMPAC expenditures – including polling and political consultants – and whether those services can legally be classified as nonpolitical administrative costs.

Another $650,000 raised by TRMPAC from individuals was used for direct and in-kind contributions to the key House races.

The $190,000 transaction "is something we've been aware of since we've been conducting this investigation," said Gregg Cox, chief prosecutor of the district attorney's Public Integrity Unit. "Everything related to TRMPAC's raising of and use of corporate dollars is part of our investigation."

Fred Lewis, director of the citizens interest group Campaigns for People, said he questions why a Texas-based group trying to elect state legislators would suddenly send $190,000 to Washington, unless it knew it couldn't donate it to races itself.

"I think there are circumstantial indications that they laundered money," Mr. Lewis said. "I think the $190,000 is very suspicious and deserves all the scrutiny it can get."John Colyandro, director of TRMPAC, could not be reached for comment Wednesday, but he had earlier told The News that he and the group followed the law.

"I feel very comfortable about where we are," he said.

Mr. Lewis said the law in Texas governing corporate contributions dates back to 1905, when businesses and so-called robber barons were able to control elections and openly exercise their influence.

"It's to protect the public from the war chests of the giant corporations," he said.

He pointed out that the total cost of the legislative races in 2002 was $55 million: "That's hardly a footnote for some large corporations."

"If the corporate prohibition falls to the wayside, it could get to where the public has absolutely no input into their Legislature," Mr. Lewis said.

The district attorney's office also is conducting a separate investigation into corporate contributions used by the Texas Association of Business, which spent $1.9 million on the same key legislative races in favor of the Republican candidates.

The TAB money was used to produce and mail brochures that attacked the Democratic candidates as anti-education and anti-business.

TAB officials have argued that the money was not a political contribution to aid a particular candidate but was for issue ads for which anonymous corporate donations can be used legally.